Abstract:
The study was conducted on the Practices and Challenges of Value-Added Tax Refund: In the
Case of Addis Ababa. The main objective is to assess VAT refind practice and challenges . The
study employed both quantitative, and qualitative approaches using descriptive research design.
For the source of the the data primary and secondary data were employed. The population of the
study was employees and taxpayers. From 244 population 144 sample sizes were calculated and
only 138 were used for data analysis. In addition, eight tax office employees were used for
interviews. To identify the sample simple randm sampling technique was used. The data was
collected using a questionnaire, interview, and document review. For data analysis, descriptive
analysis such as mean and standard deviation were employed and tested using a t-test
Accordingly, the findings in the case of the VAT refund legal framework, showed fewer
application of the legal framework. Next for awareness of VAT refunds, the results show that less
practice in awarding the taxpayers their responsibility as expected. In addition, the findings for
branch VAT procedures are still not satisfactory as a procedure outlined by the regulation
guidelines. In addition, the results found on the VAT refund-related challenges also found as
hinders to more improve the VAT refund process based on the evidence of the office. Based on
this conclusion and recommendations were forwarded. Then accordingly, the results concluded
that still the branch VAT refund has problems with the VAT refund legal framework, awareness
of VAT refund, VAT refund procedures, VAT refund-related challenges, and causes for VAT
refund claims, which put fundamental challenges that the tax the office and taxpaters face,
currently, confronted while doing their day-to-day activities. Then based on these results the
management recommended alleviating the existing challenges and promoting effective VAT
refund procedures also, it is recommended that the government should facilitate things and take
more role to solve the existing and new VAT refund-related challenges in the brach.
